Why Southern Company and Bloom Energy Are Combining Fuel Cells and Batteries

One of the biggest utilities in the U.S. and a Silicon Valley tech company are combing the latest in energy technology to sell a system that can both generate and store electricity onsite at a building.

Southern Company and its subsidiary PowerSecure announced on Tuesday morning that they are buying 50 megawatts of fuel cells from Sunnyvale, Calif.-based Bloom Energy.

Fuel cells are devices that generate energy through a chemical reaction commonly using natural gas. Unlike solar panels, fuel cells can create electricity around the clock, not just when the sun shines.

Under the new deal, PowerSecure is packaging Bloom Energy’s fuel cells with Lithium-ion batteries and electrical infrastructure, so that the electricity generated by Bloom Energy’s fuel cells can be stored and used by a customer when needed. Southern Company plans to sell the tech to corporate and industrial customers under long-term contracts.

The tech union could also possibly help Bloom Energy continue to access certain incentives, like a California subsidy that more recently has pivoted toward batteries and away from fuel cells.

During a press conference about the new deal, Southern Company’s CEO Thomas Fanning called the partnership “a fascinating development,” and said it’s about being able to sell tech for the customer premise. Unlike Southern Company’s traditional model of transmitting electricity from a coal or gas plant many miles over the power grid to a customer’s building, fuel cells and batteries place the energy infrastructure right at the customer’s buildings.

Bloom Energy CEO K.R. Sridhar compared how energy technology is becoming more “distributed,” to how computing and telecom infrastructure have previously moved from centralized systems to distributed systems. On a call with Fortune, Sridhar said the new energy storage and fuel cell systems would be customized for customers, calling the energy that they’d create and store “designer electrons.”

Retailer Home Depot plan to use the new fuel cell and battery combo. Health provider Kaiser Permanente is possible interested in the energy storage option, but is deploying 30 megawatts of fuel cells using project financing provided by Southern Company.

Southern Company SObought PowerSecure for $431 million earlier this year to help it face the growing trend of energy infrastructure becoming more distributed. The 15-year-old PowerSecure sells tech to create “microgrids,” which is a portion of the grid that can operate independently from the rest of the power grid. The company has been selling backup generators, solar panels, and batteries that can help businesses either maintain operations through grid blackouts or to save money on energy bills.

Despite Southern Company’s investment in new technology, much of the company’s business still focuses on existing energy and grid technology and systems. Southern Company serves nine million customers through its subsidiaries and has 44,000 megawatts of generating capacity much of it from coal, natural gas, and nuclear.

A combination of economics, regulations, and new technology are pushing energy companies like Southern Company to slowly shift energy infrastructure toward cleaner and distributed sources.

Despite the explosion of computing and communications technology in Silicon Valley, energy tech—and the startups that have tried to make it—have had a tough time. At one point Bloom Energy had a reported valuation of close to $3 billion, and has been trying to go public for years.

The company raised over $1 billion from investors like Kleiner Perkins and NEA. Bloom Energy’s board includes former Secretary of State Colin Powell, AOL founder Steve Case, and Kleiner Perkins partner John Doerr.

Bloom Energy doesn’t disclose its financials or pricing of its fuel cells. But if the company does go public, it will eventually disclose more details about its revenues, operating expenses. and earnings.

Updated on October 26, 930AM PST to clarify that Kaiser is using Southern Company project financing and has yet committed to the battery tech option.

Leadership Lessons from CEO Coach Bill Campbell

Bill Campbell, a legendary mentor and executive coach to many of Silicon Valley’s luminaries, died in April. On stage at Fortune’s Brainstorm Tech conference in Aspen, a few of his mentees paid tribute to his impact on their lives and the tech industry.

John Doerr, a partner at Kleiner Perkins, Emil Michael, SVP of business at Uber, Shellye Archambeau, CEO of MetricStream, and Brad Smith, Chairman and CEO of Intuit, shared their memories and lessons from a mentor they remember to be tough, caring and frequently profane.

Campbell did not believe in positional authority, according to Smith. “Your title makes you a manager. Your people will decide if you’re a leader, and it’s up to you to live up to that,” he said. Campbell told managers a strong company culture was a better way to motivate employees. They should “create the environment where they can do the best work of their lives.”

Campbell taught Michael to “be brave” about things like layoffs during difficult times after the dotcom boom at TellMe Networks. You need to lean into hard problems because they won’t go away, says Michael.

Great companies are bought, not sold

“When you get in hard times, its terrible thinking to decide to sell,” Michael says he learned from Campbell. “Get back to building a great company.” It worked for TellMe, which turned itself around and went on to sell to Microsoft at a profit to investors.

Do what’s right, even if it’s not in fashion

“Bill was focused on diversity, especially gender diversity, before it was cool and even in the news,” Archambeau said. Campbell sparked the idea to launch a women’s entrepreneurship conference series and funded the first one himself. “One of my favorite sayings from Bill was, ‘Yes, we absolutely need to change the overall profile [of executives at the company] and we will hire the best person for the job. The best person can be a woman, it may just take a little longer.’”

Campbell did not place much value on degrees or even IQs—he cared about courage and getting things done. “Bill loved people that had dirt under their fingernails, get-shit-done kind of people,” says Smith. “That validated a lot of people. He gave people a shot.”

It’s not about you, it’s about the team

Campbell didn’t want attention for his work. Though he worked with a lot of celebrity CEOs, he didn’t like ego. “He believed in team. He lived the kind of values he taught,” Doerr said.

“I don’t think you can be an effective coach and be on stage,” he added. “You gotta call the plays from the side.”

Silicon Valley Venture Capitalist Tom Perkins Dies

Tom Perkins, one of the founders of famed Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, died Thursday night at the age of 84.

Perkins died of natural causes at his home in Tiburon, Calif., near San Francisco, after a prolonged illness, his longtime assistant confirmed to the New York Times.

Perkins helped found one of the best known and successful venture capital firms in Silicon Valley in 1972, when the idea of investing small amounts in risky startups in return for an equity stake was still an unusual arrangement. Eventually, Kleiner Perkins’ investments helped spawn tech giants like Google (now Alphabet), Netscape, AOL, and Amazon. He also helped recruit John Doerr to the firm, who also went on to be a high-profile venture capitalist.

In later years, Perkins made headlines for more controversial moves. A decade ago, he left Hewlett-Packard’s board after he discovering it had secretly obtained his phone records and those of journalists as part of an investigation into a board leak. The board was eventually overhauled because of the incident.

In 2014, Perkins again made headlines when he wrote a letter to the editor of the Wall Street Journal in which he compared growing dislike for the wealthy, or “1%,” to the Jewish Holocaust. Perkins later admitted that the comparison might have been too strong, but still maintained that there was growing animosity against the wealthy, even as Kleiner Perkins distanced itself from him and his comments.

“I wouldn’t say taxation is a form of persecution,” he said during an on-stage interview that year with Fortune’s Adam Lashinsky. “But the extreme progressivism of the tax system is.”

Brook Byers and Frank Caufield, fellow Kleiner Perkins co-founders, said in a statement that Perkins “defined what we know of today as entrepreneurial venture capital by going beyond just funding to helping entrepreneurs realize their visions with operating expertise,” according to the Times.

Death of Intel’s Andy Grove Felt Across Tech Industry

Andrew Grove, Intel’s legendary co-founder and former CEO, passed away on Monday at 79, Intel said. He was one of the business world’s most revered leaders who helped to usher in today’s era of computing. He was a TimePerson of the Year who was known for his famous mantra against corporate complacency, “Only the paranoid survive.” News of Grove’s cut deep in the technology industry, in which he was a source of inspiration.

Here’s a selection of what many high-profile leaders said about Grove following his death:

Apple CEO Tim Cook:

Andy Grove was one of the giants of the technology world. He loved our country and epitomized America at its best. Rest in peace.

It’s called the Energy Breakthrough Coalition (EBC), and is being launched in partnership with Mission Innovation — a promise by 20 nations to double their commitments to early-stage, clean energy research and development. Basically, EBC would provide early-stage financing to begin commercializing the government R&D.

Despite the grandiose announcement, and accompanying media coverage, this is very much a work in progress.

First, EBC has not yet hired any investment staff or other professionals who would manage the money, conduct due diligence or provide operational expertise to the startups, according to Bill & Melinda Gates Foundation spokesman Jonah Goldman. Nor has it identified any such individuals.

Second, while Gates has publicly pledged $1 billion of his own money, none of the other named investors have made, or been asked to make, specific financial commitments. Goldman said that Gates has determined via personal conversations that the named investors are good for “more than $1 billion,” and that he expects the total to increase as others sign on. But, again, no contracts have been signed, which maybe isn’t surprising since Zuckerberg et al don’t yet know who’ll actually be investing the money — or how.

Third, the financial structure is not yet settled. Gates has evolved in his thinking on this — particularly as Mission Innovation added more countries than originally anticipated — and now favors either a single fund or a series of funds. But those are two different things, particularly if the series of funds would include some sort of later-stage investment vehicle that could support promising companies past their early stages (which often is when the biggest checks are required). EBC also is open to investing alongside venture capital firms, although it is unclear how its “flexible” time horizons would coexist with established, shorter-term VC fund structures.

Goldman says that all of these issues are expected to be worked out over the next year, with EBC not planning to make its first investments until late 2016.

To be sure, EBC could become a vital innovation engine as the world seeks to reduce carbon from its energy input. And Gates was smart to piggyback on the Paris talks to amplify his plans. For right now, however, it’s still all talk. We’ll check back in a year to see if the money has begun to flow.

Shyp, a mobile shipping app, raises $50 million

In an increasingly Uber-dominated world, mobile apps that allows you to order a service on-demand are disrupting everything from transportation, to grocery shopping, to health. Shyp is aiming to take on shipping, allowing consumers to ship anything to anywhere in the world, from an app on your phone.

Kleiner Perkins is taking a big bet on Shyp, leading a $50 million funding round in the company, with the firm’s partner and legendary investor John Doerr joining Shyp’s board of directors. Past Shyp investors Homebrew and Sherpa Ventures also contributed to the round, in addition to independent investors such as Digg founder Kevin Rose and Rent The Runway CEO Jennifer Hyman, among others. Fortune has learned that the post-money valuation for the company is above $300 million.

Shyp CEO and founder Kevin Gibbon, who made six figures in college by being a power seller on eBay EBAY, has been thinking about this idea for awhile. Shipping was a tedious process when he was selling, and there needed to be a solution to avoid waiting in long lines at the post office, or shipping stores.

The premise behind Shyp is simple. You take a picture of the item you need to be shipped, enter the shipping address, and the company will send one of its “Shyp Heroes” to pick up the item at your home or location. Shyp will then package the item, choose which shipping method—FedEx FDX, UPS UPS, or the U.S. Postal Service—is most cost-effective, and will ship the package for you.

Consumers don’t need to wait in line, but they do incur flat $5 fee for each order (which could include multiple shipments). The app also includes an in-app estimator that will estimate the cost of shipping before you use Shyp.

Shyp makes most of its revenue through negotiating discounted shipping costs with FedEx and UPS. While Shyp pays a fraction of the shipping cost passed onto consumers, users are always quoted the same, lowest prices they would find if they shipped through FedEx, UPS, or the Postal Service.

Shyp is currently available in San Francisco, New York City (Manhattan and Brooklyn), Miami, and Los Angeles. And Shyp will send items to anywhere in the U.S. and internationally.

“In the way that Uber has transformed transportation in cities, this is going to change shipping,” said Doerr in an interview. The market is massive he says, with the logistics and delivery industry worth around $220 billion, including the annual revenue from companies like FedEx, UPS, DHL, and USPS. Part of what attracted the firm toe Shyp was the fact that it has done little to no marketing, but it has grown as rapidly as many popular on-demand services, he adds.

The company’s tens of thousands of users is modest, but engagement is notable. The number of shipments have increased by nearly 500 percent since last year, and customer growth is surpassing 20 percent month-over-month.

For Kleiner, Shyp fits into one of the three waves of disruption taking place in the technology industry, Doerr explains. In addition to expansion of social and the ubiquity of mobile, the third leg is the intersection of social, local and mobile. Kleiner investments in these areas include Uber, grocery delivery startup Instacart, restaurant delivery startup DoorDash, and now Shyp.

One vertical where Shyp is placing its bets is in making returns for purchases made online seamless for consumers. Shyp allows people to return items to a number of large retailers, including Amazon AMZN, Gap, J.Crew and Nordstrom, with the simplicity of entering an order number, or including the shipping label from the order. Gibbon explains that the order number for online purchases acts almost like a social security number for purchases, so it’s easy for Shyp to ensure that returns are directed to the right place even if the purchaser doesn’t have a pre-paid label.

Should UPS and FedEx be worried? Doerr says he’s talked to high level executives at both companies, and the shipping giants see Shyp as a “complimentary network.” Gibbon agrees, and sees these companies as partners.

The company will be using the funding for US expansion and for developing deeper partnerships with retailers, Gibbon says, especially those who betting on newer technologies to engage their customers.

Kleiner bets the farm

In the past decade Kleiner Perkins Caufield & Byers has doled out $10 billion to its major investors, all of which are university endowments, philanthropic foundations, or public pension funds. Silicon Valley’s top venture capital firms never divulge their actual performance. Yet this tidbit comes directly from John Doerr, Kleiner’s preeminent partner, who is so intent on ensuring that I’m correctly processing the significance of that figure that he helps me with the math. “That’s $1 billion a year on average,” he says. “Those are great gains. That’s not a couple university chairs, and it’s not a building or two. That’s whole quadrants of a campus.”

Point well taken, John Kleiner Perkins has long defined the gold standard for venture capital; one institutional investor estimates that the money it had with Kleiner grew tenfold over the period Doerr is talking about. The Kleiner hit parade stretches back 36 years and includes early bets on industry icons Genentech, Compaq, Sun, Netscape, Amazon, and Google. Of its hundreds of competitors, only Sequoia Capital, an equally storied firm with a similarly successful star investor, Michael Moritz, comes close to matching that track record.

Yet Doerr sounds a tad defensive when I visit him at Kleiner’s offices on a hazy day in late June, the normally pristine skies above Menlo Park, Calif., turned gray by the wildfires menacing the region. Kleiner Perkins, you see, is at a crossroads, and Doerr knows it. About three years ago he began steering his partners toward an emphasis on alternative-energy projects, or “green tech” in Kleiner parlance. The new eco-focus has attracted plenty of hoopla, most notably late last year when Doerr hired his pal Al Gore as a Kleiner partner.

Yet the firm’s shift toward energy investing is only part of the story. As important is Kleiner’s steady drift away from the industry that made the firm what it is today: the Internet. Kleiner’s investments defined the Internet’s first generation. Without Kleiner there was no Netscape, and without Netscape there was no cash-gushing dot-com boom. Yet Doerr and his partners have been absent not only from the biggest deals to date among the next generation of Internet companies—MySpace, YouTube, and Facebook—but also from the buzziest prospects for big paydays down the road—LinkedIn, Yelp, Twitter, and a host of similar Web 2.0 startups whose common thread is an interactive, or “social,” relationship with users.

Doerr, who is 56, only grudgingly accepts the premise that Kleiner has turned its back on the consumer Internet. “We made a very deliberate and strategic decision,” he says with the baritone of a deejay, which he was in college. “We could’ve doubled down on Web 2.0, whatever that is. We didn’t.” Instead, the firm has been diversifying. First, in 2006, it created a $200 million fund focused exclusively on preventing infectious-disease pandemics. Then, last year, it raised $360 million to invest in China—Kleiner’s first foray outside the United States and a project that already is off to a rocky start because one of its two key recruits quit within months. The newest addition is the $500 million Green Growth Fund, launched in May.

But the green fund represents more than just an expanded product line for Kleiner—it’s an attempt to stretch the definition of venture capital. Ever since the industry got its start 40 years ago, VC firms have always been small partnerships investing relatively small amounts of money, hoping for a few giant payouts to outshine the inevitable flubs. But together Kleiner’s three most recent funds—including its latest, $700 million venture fund raised this spring—amount to nearly $1.6 billion, a paltry sum compared with the giants of private equity but a massive amount for the venture business. And unlike the usual startup-centric VC approach, Kleiner’s strategy focuses on existing alternative-energy companies that are well beyond the launch phase.

In essence, like some of the biggest private equity shops, Kleiner is becoming more of an asset gatherer, as opposed to a builder as it was in the early days of Amazon and Google. Then again, Kleiner needs more money than ever before because energy projects require billions of dollars in investments, not the millions required to jump-start a Web idea. (A supply of Red Bull, beanbag chairs, and a few powerful PCs are a lot cheaper than factories, transmission lines, and regulatory-compliance departments.)

Having said all that, we are talking about Kleiner Perkins here, not some untested investment group, and already there are hints that the Kleiner mystique will light up new fields of dreams. As we’ll see, there’s a top-secret gem hidden in the firm’s portfolio that could validate the whole risky wager on the energy business. Yet it’s this move into green that competitors and admirers alike consider Kleiner’s riskiest decision ever. “I hope to God they’re right,” says a Valley mover and shaker who invests in Kleiner’s funds. “But if they’re wrong it’ll be the end of Kleiner Perkins.”

It’s late May, and I’m enjoying an outdoor dinner at the luxurious Four Seasons Aviara in Carlsbad, Calif. I’m here for AllThingsD, a tech-industry confab. The gang’s all here, from industry heavyweights Bill Gates and Barry Diller to “it” entrepreneurs Mark Zuckerberg of Facebook and Max Levchin of Slide, and naturally venture capitalists are on the prowl for startup ideas. That night and for the rest of the conference I ask some of the smartest people in the tech biz about Kleiner Perkins, and the responses, all off-the-record for fear of offending a powerful firm, are nearly identical: “What the hell happened to them?”

Several Valley investors who monitor startups tell me they don’t bother sending Web-oriented entrepreneurs to pitch Kleiner anymore; they say the firm just doesn’t seem interested. As if to prove the point, not one Kleiner partner attends the 600-person event.

Kleiner insists it is still keen on the Internet. For example, it has invested in a company called Aggregate Knowledge, an online advertising business, and CoolIris, a photo and video site that has a clever way to match content with ads. By and large, though, Kleiner thinks the Web, at least on PCs, is an idea that’s had its day. Web surfing on cell phones—now, that’s different. That’s why Kleiner recently created a $100 million “iFund” for backing startups building products for Apple’s iPhone and other mobile devices.

“Mobile is an enormously important new opportunity,” says Doerr. “We think it’s the next computing platform and will rival the personal computer.” (Actually, calling the iFund a “fund” is probably too strong. It’s really just a repurposed chunk of existing capital. This is classic Kleiner: Take money already in pocket, relabel, issue press release. Voilà—an investing meme! Silicon Valley cynics call this tactic “venture marketing.”)

As for the road not taken, Kleiner partners stick to the party line: We haven’t missed that much. During the two weeks of interviews with 15 partners, I repeatedly hear the opinion that having sat out Web 2.0 just hasn’t been a big deal. “Take YouTube out,” says Randy Komisar, a seasoned technology executive who joined Kleiner three years ago. “What’s done well?” He’s right, to a point. Sequoia scored when Google bought YouTube in 2006 for $1.65 billion. But in general there have been few “exits,” VC-speak for IPOs or company acquisitions. In the second quarter 0f 2008 there wasn’t a single IPO of a VC-backed technology company, a dry spell that hadn’t happened in 30 years.

The outcome of Kleiner’s wager will be known only when the crop of companies on which it passed either start selling out at fire-sale prices or go public at register-ringing valuations. Its stance makes for a stark bifurcation in the Valley: those who have thrown their lot in with Web 2.0 and those who are betting on the hot new thing. “Are you saying the entire reincarnation of the Internet won’t present any great returns? Come on!” snorts a top executive with a leading online company when I repeat Kleiner’s thesis. Adds David Sze, a partner with Greylock Partners: “I think there are going to be plenty of exits and that we’re going to make money.” Sze has a lot riding on his assertion. Almost all his investments are in Web 2.0 companies like Facebook, LinkedIn, and Digg.

One top-tier firm that hasn’t taken a religious position on green vs. web is Sequoia Capital. In addition to backing YouTube and LinkedIn (which recently attracted new investors at a billion-dollar valuation), Sequoia has also made 14 investments in alternative-energy companies. One is a battery company called A123 Systems. Sequoia’s Moritz recently told a group of entrepreneurs that his firm has made these investments “quietly”—he didn’t add “unlike Kleiner,” but he didn’t need to. Asked if Sequoia considers such factors as social responsibility in its investments, Moritz noted that the firm’s only real job is making money for its investors, many of whom are in the philanthropy or nonprofit business themselves, and therefore better positioned to spend on saving the world.

Menlo Park is where deals get done in Silicon Valley, but Sunnyvale is the kind of town where the companies actually get built. The temperature nears 100 degrees outside as I drive there to meet K.R. Sridhar, CEO of Bloom Energy, Kleiner’s first renewable-fuels investment and its favored showpiece to explain to the rest of the world what it is doing. Sridhar, a 47-year-old engineer who worked on one of NASA’s Mars lander programs before founding Bloom in 2001, explains to me how the company is developing a fuel-cell system that will power single-family homes or entire office complexes. As he speaks, though, my eye is drawn to the photographs of the public-policy big shots who have toured Bloom’s facility with Sridhar: Al Gore, Colin Powell, Arnold Schwarzenegger, Michael Bloomberg, Bill Clinton, and the celebrity journalist Tom Friedman, among others.

This collection of luminaries is telling. For one thing, Bloom isn’t ready to share many of the basic details of its business: who its customers are, what specifically it will sell, when it plans to bring its products to market, and so on. In other words, it has plenty of secrets to keep, yet it’s a fixture on the green-is-good political tour of corporate America. What’s also telling is the star power of Kleiner Perkins. Gore, as noted, is a Kleiner partner. Powell is a “strategic limited partner,” whatever that is, as Doerr might say. Friedman is a cross-country-skiing buddy of Doerr, who likes to pepper his commentary about global investing with reminders that we live in a “flat world.”

Investors, including Kleiner, have pumped more than $200 million into Bloom, yet it is at least a year from being ready even to make its product at commercial scale, much less make money selling. It’s an audacious risk that is being played out repeatedly in Kleiner’s portfolio. Ray Lane, the former president of Oracle who joined Kleiner in 2000, says one of his portfolio companies, GreatPoint Energy, won’t have its first commercial plant for turning coal into natural gas in operation until 2012, which would be seven years after Kleiner first invested. Another Kleiner investment, solar-panel maker Miasole, has missed several major product milestones and replaced its CEO. Yet Miasole is trying to raise $200 million from hedge funds and other investors at a valuation of around $1 billion.

There is one company that could be Kleiner’s first energy-sector grand slam—and there’s nothing green about it. The secretive, seven-year-old company, called Terralliance Technologies, has developed software that purports to make it easier and cheaper to find and extract oil and natural gas. Rather than license its software to petroleum giants, Terralliance decided to become a wildcatter itself. According to Kleiner partner Joe Lacob, Terralliance has already dug 100 wells around the world and is in the process of raising additional capital. Sources peg the new financing at more than $1 billion and a valuation of around $4 billion. In addition to Kleiner, Terralliance investors include Goldman Sachs and San Francisco hedge fund Passport Capital.

Terralliance, founded by software entrepreneur Erlend Olson, is so stealthy that it has no phone listing in Newport Beach, Calif., where it’s based. Its corporate website consists of one page that shows a map with three locations in North America, one in Europe, and one in Southeast Asia. A three-sentence description of the company says, “Terralliance has already achieved exploration success rates dramatically above the industry norm.” The company may be quiet, but it is well connected. Several years ago it retained Richard Richards, a former Reagan aide and chairman of the Republican National Committee, to make introductions to foreign governments in order to obtain commercial visas. “They’re very secretive because they’ve got some technology they don’t want the big guys to steal,” says Richards. He says Terralliance hasn’t called in a couple of years because it now has a far better-connected advisor helping it with foreign governments: former Secretary of State Colin Powell.

If Terralliance’s technology works nearly as well as its website says it does, the company could be ready to make a big splash. It recently hired a chief financial officer, Stephen Buscher, a former investment banker with Lazard Frères and Merrill Lynch who previously was CFO of Russian oil company Urals Energy, which is listed on the AIM stock exchange in London. Reached at his office in Newport Beach, Buscher said, “We’re not prepared to make any comments.”

It would be ironic, to say the least, if Kleiner’s first “green” jackpot turns out to be a company that actually drills for oil. Doerr, who has made the reduction of fossil-fuel use a personal crusade, refused to comment on Terralliance.

There’s one other complicating factor at Kleiner: its reliance on Doerr himself. Doerr and his partners tell outsiders—and themselves, apparently—that the firm is a true partnership and that Doerr is but an influential cog in the machine. It’s a useful notion that makes Kleiner’s institutional clients feel as if they’re entrusting their money to a team, not just one superstar. But John Doerr is the de facto managing partner. If he calls a meeting for a Sunday afternoon, the partners suit up and assemble. It was he who led the charge into alternative energy. He even leads when something isn’t his idea. Matt Murphy, who runs the iFund initiative, says Doerr “dragged his feet” about making a push in mobile-phone investments. But before long “John and Steve talked”—that would be Steve Jobs, naturally—and the result was Kleiner’s new zeal for iPhone-related companies. Says a Silicon Valley entrepreneur who has worked with the firm for well over a decade: “John has dominated Kleiner Perkins since the day I met him, and he has always denied it.”

THE GREEN GAMBLER: Doerr’s investors are giving him the benefit of the doubt. That’s no surprise. After all, he has made an awful lot of people rich.Photo: Robyn Twomey

Doerr’s preeminence might rankle his colleagues—if it weren’t for all the money he makes them. Brook Byers, the name partner who hired Doerr in 1980, calls him “one of the legendary venture capital investors of all time.” But over the past few years three top Kleiner producers left the firm: Vinod Khosla, Kevin Compton, and Doug Mackenzie. Each made the usual noises about family and new pursuits—and each is working elsewhere as a full-time VC today. (Khosla caught the “green” bug first, and today his new firm, funded mostly by Khosla himself, is at least as important an alternative-energy investor as his old firm.)

Doerr can’t do everything, of course, and with 32 full-time investment professionals, Kleiner Perkins is bigger than it’s ever been. Byers runs a distinct biotech practice along with longtime partner Joe Lacob (who now spends half his time on energy) and two medical industry veterans, Beth Seidenberg and Dana Mead, hired in 2005 to eventually take over that business. But biotech never has produced the profits that Doerr’s side of the shop has. In tech (info and green), Ray Lane is highly valued for his operational chops but has yet to score big as a VC. Top partners Ted Schlein and Randy Komisar have broad experience but no massive payouts. Finally, there is Kleiner’s junior varsity, a team of accomplished brainiacs who include Trae Vassallo, Wen Hsieh, Chi-Hua Chien, Ellen Pao, Aileen Lee, and Ajit Nazre. These relative youngsters (most in their 30s) spend years serving apprenticeships to the older partners, and most are just beginning to lead their first investments, making it impossible to judge their company-building acumen.

Lately Kleiner Perkins has been stocking up on aging stalwarts of the technology industry. Bill Joy, 53, a former chief scientist at Sun, joined Kleiner three years ago. Bing Gordon, 58, a co-founder of Electronics Arts, signed on in May. John Gage, 65, another top scientist at Sun, joined in June—to work on alternative energy. None have any experience in venture capital and aren’t expected to lead the firm.

Who will lead Kleiner Perkins when Doerr hangs it up? Younger partners at other firms, like Roelof Botha at Sequoia and David Sze at Greylock, have begun making prominent names for themselves. It’s an issue Doerr thinks is overblown. He brings up an article in the defunct magazine Upside in 1989, when Tom Perkins retired, that asked if Doerr and Byers would drop the baton. They obviously didn’t. Of course, by 1989, Doerr had Compaq and Sun Microsystems under his belt. Byers had backed companies that revolutionized the detection of prostate cancer and the effectiveness of ultrasound scanning. Today’s crowd, bright and credentialed though it may be, doesn’t have any hits of that stature to its credit.

For now, investors have little choice but to give Kleiner Perkins the benefit of the doubt. More than one friend of the firm reminded me that it was derided for investing in Internet companies in the mid-1990s, when the idea seemed hokey and bound to fail. Plenty of other firms passed on the opportunity to invest in Google, which was just another search engine company in 1999. “In our business we don’t know if we’re right about anything for years,” says Byers. “It’s a humbling business.” If Kleiner is right, if alternative energy is a hit and if the IPO market returns, nothing else will matter. And John Doerr will be able to boast of whole university campuses being built with the dollars earned by Kleiner Perkins.